Opposition Youth Allowance bill referred to committee

Opposition Youth Allowance bill referred to committee

Posted 22/11/2010 by Luke Buckmaster

A Private Member's Bill, introduced by Senator Fiona Nash, seeking to make it easier for students in inner regional areas to qualify for Independent Youth Allowance has been referred to the Senate Education, Employment and Workplace Relations Committee for inquiry and report by 15 February 2011. The purpose of the bill, the Social Security Amendment (Income Support for Regional Students) Bill 2010, is to require that the eligibility criteria for students on Independent Youth Allowance from very remote, remote and outer regional areas be extended to include inner regional students.

Background to this issue can be found in a recent post on Senator Nash's Bill and a related House of Representatives motion introduced by Opposition Whip, Nola Marino (and passed by 74 votes to 70). A key issue likely to be examined in the inquiry is the cost of the proposal. The Explanatory Memorandum to Senator Nash’s Bill suggests that the financial impact of the change will be approximately $90 million per annum. However, there is no indication in the Explanatory Memorandum as to how this figure was derived.

It is unclear how many additional students would become eligible for Independent Youth Allowance under the changes. Currently, there is a lack of data about how many inner regional students are ineligible for Independent Youth Allowance under the existing arrangements.

Another key issue is the source of funding for the change sought by the Bill. The Explanatory Memorandum says statesthat the change is ‘to be budget neutral, with funding to be appropriated from the Education Investment Fund’. The inquiry is therefore likely to examine the question of whether funds from the Education Investment Fund may be used for purposes such as those outlined in the Bill. According to the Fund's website, it was established in order to 'support world-leading, strategically-focused infrastructure investments that will transform Australian tertiary education and research'.

Further, given that under Section 53 of the Constitution, the Senate may not initiate money bills, there is likely to be some examination of constitutional issues arising from the question of funding the change proposed by the Bill.

In this connection, on 17 November, the President of the Senate, Senator John Hogg, tabled correspondence relating to the Bill. This included a letter from the Government Leader in the Senate, Senator Chris Evans, which enclosed advice from the Attorney-General suggesting that 'there are constitutional problems with the introduction of the Bill as it would, if enacted, appropriate revenue by increasing payments of youth allowance under the relevant standing appropriation'. Senator Evans requested Senator Hogg's 'assistance in drawing this matter to the attention of Senators so that steps may be taken to ensure the Bill does not proceed'.

In response, Senator Hogg put the view that 'the bill in question does not appropriate money' and 'does not need to do so because any funds required to support the measures in the bill have already been appropriated by the Parliament in the form of a special appropriation of indefinite amount in section 242 of the Social Security Administration Act 1999'. Senator Hogg added that he does 'not intend to take any steps to ensure that the bill does not proceed'; rather, he 'intends to allow proceedings to occur in the usual way and the Senate to come to a decision on the matter'.

The closing date for submissions to the inquiry is 6 December 2010. Further information can be found on the inquiry'swebpage.